Did it end globalization, COVID-19?
Less than 12 months ago many predicted that the shutdown caused by COVID-19 would bring an end to the globalization process, at least as we have experienced over the past decades. The pandemic disrupted the normal flow of people and goods, and governments began making plans to manage economies without dependence on third countries.
However, today the situation is very different. Technology enabled the normal continuation of global operations and statistics speak of very little change in terms of the volume of world trade exchanges. Moreover, the World Trade Organization has announced an 8% increase in global trade during the first 6 months of 2021, recovering the loss of 5.3% of the previous year.
The low level of foreign direct investment continues, which fell to an alarming 42% in 2020 and foreign capital has moved further away from the major European countries. This consequence could hardly be avoided in the conditions when most of the enterprises were temporarily closed, it was impossible for foreign investors to start new projects. Indicators are that fears of a pandemic and anti-COVID measures will discourage foreign direct investment even for the foreseeable future.
The primary message coming from the pandemic is that global trade and cooperation practices between professionals in different countries was much less vulnerable than analysts had thought, but also the country itself had much more pessimistic projections about the possible consequences of closures .
The biggest risk in terms of post-pandemic globalization is that states can create bureaucratic barriers to ensure that they will be less dependent on the outside if similar scenarios like those of 2020 are repeated, which in itself may discourage investment and strengthen trade ties.
The European Commission, in a recent investigation, noted that only 137 of the 5,000 products imported daily into the Union belong to "sensitive sectors", which the EC has pledged to try to increase domestic production and end its dependence on out. Of course vaccines and other medications are a priority. Apart from these sensitive sectors, the process of economic globalization is not believed to be threatened even after the pandemic.
Adapted from "Project Syndicate" / tiranapost.al